Liu Jinyi, deputy general manager with it, said in an interview on March 4 that it seemed to have become a trend for steelmakers in the Chinese mainland to stretch out reach to other industries such as real estate development. However, no matter what industries they expanded to, it took them a period of time to make profit. Based on a sharp edge its parent Baogang Group owned in resources, it was inching closer to a resource-oriented direction, an effort to achieve an industrial shift.

He reiterated that as planned, it would build a joint-venture steel plant in Mongolia and the annual production capacity was five million tons. And provided that the plant could be completed within two to three years, a major rare earth mine of it would be shut down. And by then, it would see rare earth raw materials be mainly from the development of tailings dams.

People in the know disclosed that it was in close talks with the Mongolian party and provided that everything went on well, the stell plant would be completed in two phases within three years and production capacity of the phase-I project would be three million tons per year. In order to ease pressure from rising demand for iron ores, it planned to use pig iron as raw materials in the phase-II project and the annual production capacity would be two million tons.

He pointed out that this was actually a win-win deal and in addition to the Chines firm, Mongolia would benefit much from it. Mongolia had only one steel plant currently and the annual production capacity was only about 300,000 tons. Steel turned out by the plant could have not well satisfied the demand of the nation. In addition, it had had a plan to develop its own mineral resources.

He added that the cooperation involved an iron ore mine, too and so far, both sides had almost reached an agreement over most of the details. They were busy in negotiating major ones including investment proportion and management mode currently and the worst result would be that they would jointly operate the plant. After that, the Shanghai-listed firm would kick off the construction.

Baotou Steel plans to import about 4.5 million tons of iron ores this year, up three million tons from a year ago.